IBM (IBM), Oracle (ORCL), and NuScale Power (SMR) stocks dropped to 52-week lows on Thursday amid concerns over AI-related investments and financial returns. IBM reached $204.44, Oracle fell to $123.66, and NuScale hit $7.52. The declines followed analyst downgrades and credit rating cuts, with Argus reducing IBM's price target to $280 from $360 and S&P Global lowering Oracle's credit rating to BBB-. The sell-off reflects a broader market shift toward prioritizing cash flow and execution over long-term growth expectations. IBM has declined 26% year-to-date, Oracle has fallen 36%, and NuScale has dropped 46%.
Argus Cuts IBM Price Target to $280 from $360
IBM stock reached a new yearly low of $204.44 on Thursday, extending losses after the company acknowledged it failed to adapt quickly enough to shifting customer demand. IBM stated that enterprise customers are prioritizing AI infrastructure investments, delaying or reducing spending on traditional software offerings.
On Thursday, Argus analyst Jim Kelleher reduced his price target on IBM shares to $280 from $360 while reaffirming a 'Buy' rating. The downgrade followed IBM's negative pre-announcement for its fiscal second-quarter results, which indicated that key infrastructure revenue would fall short of earlier expectations. Argus added that while IBM had been monitoring higher component costs, particularly rising memory prices, the company underestimated the extent to which those market dynamics would influence customer buying behavior.
Oracle shares tumbled 6% and NuScale Power shares dropped 8%, while IBM stock pared losses to end the session 3% higher. Retail sentiment on Stocktwits for IBM remains in 'extremely bullish' territory.
S&P Global Lowers Oracle Credit Rating to BBB-
Oracle stock tumbled to a fresh 52-week low of $123.66 on Thursday amid investor concerns about the company's aggressive investments in Oracle Cloud Infrastructure, which have resulted in elevated capital expenditures and negative free cash flow.
Additional pressure came from concerns surrounding leverage and its credit profile. S&P Global lowered the company's credit rating to BBB- last week, only one level above non-investment-grade status. The agency highlighted concerns about Oracle's reliance on large customers, including OpenAI, which represents a large portion of its remaining performance obligations.
Despite those headwinds, Oracle has introduced financing initiatives, including allowing customers to deploy their own chips within Oracle data centers. The company is also competing for a major secure cloud contract with the Japanese government. Sentiment around Oracle stock on Stocktwits remains in 'extremely bullish' territory.
Truist Initiates NuScale Coverage with Hold Rating
NuScale Power stock dropped to an annual low of $7.52 on Thursday as investors remained wary of the lengthy regulatory and construction timelines associated with small modular reactors.
On Monday, Truist began its coverage on NuScale with a 'Hold' rating and a $10 price target. The firm pointed to growing enthusiasm for nuclear energy while cautioning that successful project delivery will determine which developers ultimately emerge as industry leaders. Truist said the nuclear power industry continues to benefit from strengthening customer interest and a supportive policy environment, but companies must now demonstrate they can translate those favorable conditions into completed projects.
Sentiment around NuScale stock on Stocktwits remains in 'bearish' territory.
FAQ
Why did IBM, Oracle, and NuScale stocks drop to 52-week lows on Thursday?
IBM, Oracle, and NuScale stocks dropped to 52-week lows on Thursday amid concerns over AI-related investments and financial returns. IBM reached $204.44 after Argus cut its price target to $280 from $360, Oracle fell to $123.66 following S&P Global's credit rating downgrade to BBB-, and NuScale hit $7.52 as investors questioned long development timelines for small modular reactors.
What did Argus say about IBM's price target?
Argus analyst Jim Kelleher reduced his price target on IBM shares to $280 from $360 while reaffirming a 'Buy' rating on Thursday. The firm said IBM underestimated the extent to which rising component costs, particularly memory prices, would influence customer buying behavior, leading to a shortfall in key infrastructure revenue expectations for the fiscal second quarter.
